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Equity exits weigh on currency even as long-term capital prospects improve
Profit-taking by foreign investors is pressuring the rupee despite strong equities, though analysts expect India’s market depth to attract steadier FDI flows over the next two years.
India’s robust equity market is creating near term pressure on the rupee as overseas investors monetise gains from a prolonged IPO and listing boom. Large foreign portfolio investors are repatriating profits after successful exits, adding to dollar demand and weakening the currency despite strong market fundamentals. This has coincided with net foreign direct investment slipping close to zero, intensifying currency volatility.